Skills Shortage and an Aging Workforce

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Labour Market Analysis for Small Business Literature Review May 2005

Prepared for: Community Futures Development Association of BC Prepared by: David J. Annis and Associates 17355 29 Avenue Surrey, BC V3S 0E8

David J. Annis and Associates

Executive Summary The world of work as we know it is in a constant state of flux. New and emerging technologies, changing work patterns, individual work life balance expectations, transition from employee to entrepreneur are but a few of the underlying reasons. Internationally, the labour force is changing. The competition for human capital now transcends national or geographic borders. The most important factor influencing the nature and degree of workplace changes is the shifting demographics of our population. As a society we are living longer with the consequential demands this places on our pension plans, social programs and shifting lifestyle and consumption patterns. The percentage of our society that represents our future workforce is significantly decreasing. Overall, we see the workforce participation rate dropping at a rate that must be of concern. A disconnect between individual career preference and work force requirements is resulting in a looming potential for shortages in a number of skill areas so important to a vibrant economy. This combination of an aging workforce and skill shortages is a significant public policy issue. It is also one of the most potentially ruinous threats facing small business. Despite the importance of the small business sector to economic growth, very little research has been done to clearly identify and develop strategies to address the impact of an aging work force and skill shortages on small business. The Community Futures Development Association of BC was contracted by Human Resources and Skills Development Canada to analyze the labour market for small business as it relates to skills and an aging workforce. This report is one part of that work and provides an overview of the work done in various jurisdictions to define, assess and develop strategies to address this most important issue. The information contained herein is not exhaustive but is representative of what has and continues to emerge in various jurisdictions.


Table of Contents

1. Executive Summary 2. Table of Contents 3. Context 4. Sector Overview 5. British Columbia Population Demographics 6. Literature Review Canadian American International -United Kingdom -Australia -New Zealand 7. Summary 8. Appendix

page 1 page 2 page 3 page 3 page 4 page 5 page 5 page 11 page 13 page 13 page 15 page 17 page 19 page 20


Context The Community Futures Development Association of BC was recently contracted by Human Resources and Skills Development Canada to analyze the labour market for small business as it relates to skills and an aging workforce. The project will serve as a venue to engage BC businesses in a proactive process that will enable them to deal more effectively with the current challenges they are facing in acquiring the skilled workers they need to be successful. Prior to engaging the business community in a focus group and survey process, a literature review of relevant past workforce studies is required. This report will contain the outcomes of that review. While not an exhaustive review, this document will provide a significant compendium of information on skill shortages and an aging workforce. Sector Overview In 2003, there were 325,321 registered small businesses in British Columbia. This number represents 98% of all registered companies in the province. 952,900 individuals are employed in small business in BC. Small businesses contribute 30% toward the province’s GDP and their wage bill represents approximately 1/3 of all wages paid in British Columbia. Most recent statistics indicate that small business exports total almost $10.5 billion annually. The industry distribution of small...
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